@TechReport{iza:izadps:dp16645, author={Köllő, János and Boza, István and Ilyés, Virág and Kőműves, Zsófia and Mark, Lili Katalin}, title={How Do Firms Deal with the Risks of Employing Ex-prisoners?}, year={2023}, month={Dec}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={16645}, url={https://www.iza.org/publications/dp16645}, abstract={We use linked employer-employee data to investigate a large sample of past and future prisoners in Hungary, 2003-2011. We first compare their jobs, focusing on attributes that can reduce the penalty the employer must pay for a mistaken hiring decision. Second, we study if employers insure themselves by paying lower wages to ex-prisoners. Third, we analyze whether the probability of the match dissolving within a few months is lower if the firm could potentially base its hiring decision on referrals. The composition of former prisoners' employment is biased toward easy-to-cancel jobs. In the unskilled jobs held by most of them, they do not earn less than future convicts, but a minority in white-collar positions are paid significantly less. Ex-prisoners' jobs are less likely to dissolve quickly if the hiring firm potentially had access to co-worker, employer, or labor office referrals.}, keywords={incarceration;reintegration;mobility;discrimination;Hungary}, }